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Aging Issues Radio is the station that will help you age into and through retirement. We bring advice and education on all of the issues that we face as we get older, offering financial and life strategies. Hope you enjoy the subject matter and our down-to-earth and simple solutions to the problems we all eventually face. While the issues are not unique, the solutions are for you.
00:02
You are listening to Aging Issues Radio and Joe Soricelli. This is the station that will help you age into and through time. We bring advice and education on all of the issues that we face as we get older, offering financial and life strategies. Hope you enjoy the subject matter into our down-to-earth and simple solutions to the problems we all eventually face. While the issues are not unique, the solutions are for you.
00:40
Hi, this is Joe Soricelli; I'm coming to you live from Aging Issues Radio. We're going to talk about something that everybody thinks about as they age, and that's basically housing for both your personal and financial health. See, that's my house behind me right now. I just turned 65; I am going to be staying in the house for a period of time. But there are other people that sit back and say, "No, I'm retiring. I'm thinking about changing. I'm thinking about all sorts of questions." So we're going to cover three of the basic questions that every senior faces. And the questions are: "Should I stay and age in place? Should I sell and maybe change and go live with somebody or go find someplace else to live, theoretically an assisted living facility? Or go live with one of my kids?" And then the bigger question is: "If and when (it's usually not "if," it's "when") I may need some assistance, where's the best place to provide it both from a safety perspective and a financial perspective?"
02:03
So let's start with that first question: "I want to stay. I want to stay in my house. I don't want to move. I love my neighborhood; I love my neighbors." Neighbors do move, no matter how you look at it. My father outlived everybody in his neighborhood and eventually he did relocate, but he stayed there for an extra 20 years because everybody was still there. But what we did do is we changed things in the house, because the first thing you have to look at is: Is that existing house a safe place to live?
02:41
Well, one of the reasons why I'm choosing my house as an example right now, you can notice that there's only one step to get into the house. We've all gone to houses where there is a staircase in the front. When there's a staircase in the front, it's not easy to get in and out. Everybody says, "Oh, I'm going to go in through the garage." Well, usually from the basement or the garage, there's a staircase to get to the main level of the house, and then depending upon the design of the house, there may be a staircase to get to the master bedroom suite. So that's a very important part of the puzzle when you're talking about: "Can I stay in my house? Can I create a safe environment?"...because, you see, stairs are a hazard.
03:35
There are ways to modify a house that will assist in stairs, but stairs are still going to be in the house. People put chair lifts in; that gets you up and down, and also carries the laundry basket (if you're still healthy, you don't need it), but it carries things up and down the stairs.
03:55
That's one first-level modification. It's not a very expensive and it's not a very permanent modification. Other individuals now that truly want to stay in their house long term are putting elevators in their house. And putting an elevator in the house isn't what what people think it is. It frequently is cutting a hole from the first floor to the second floor of about 42 inches in diameter, and then the elevator is a free-standing unit that just brings you from the first floor to the second floor. Basically if you design it, you can just open a trap door so it doesn't even look like there's an elevator on the second floor. Or you can build a small doorway or a section where a unit comes up. But putting elevators in the house increases the ability to stay.
04:50
Now there's tons of other modifications that we have to make. But the very first thing you have to do is: "Can I get around? Is my house going to be accessible?" So you have to look at that. Now you have to overlay: "What are the costs involved?" Putting an elevator in a house could be a $50,000 to $75,000 investment; putting a chairlift in the house is a $5,000 to $10,000 investment. It may not be a permanent solution, but it may buy you an extra five or ten years.
05:25
As you know, Aging Issues Management professes stages. Right now, I don't have to worry about getting in and out of the house or going up the steps, I'm still a healthy 65-year-old. 10 years from now, which is the next stage which myself and my wife are thinking about, maybe things will change. But we do plan on trying to stay in the house. Because there's a whole other bunch of questions that come up. And those questions are: "Where are my kids?" Well, they're all right now within 10 miles of my house; we get to see them and they get to see us. That's a piece because when and if we need help, usually the children are the first line of defense in getting that help.
05:59
The second question that comes up, as you go into retirement, and you talk about staying in your house: "Can you afford to do it?" Westchester County, the taxes are not going down. They're going up. Even if we as we age, and we get additional tax exemptions or credits for our real estate taxes, it's still pretty expensive from a tax perspective to live in Westchester. We also have that wonderful utility bill. Con Ed, once again, isn't getting cheaper; it's getting more expensive. People think about converting...we do analysis for clients on is it worthwhile converting to solar. I can't tell you because the upfront charges are fairly significant.
07:14
And then we have to talk about just simply: "I'm going to stay in this house for the rest of my life." Well, that may be a great plan, but is it feasible? Is it feasible? We all know a house in the neighborhood that somebody stayed longer than maybe they should have for possibly financial reasons. It may have been the cheapest place to live and they didn't want to relocate. But we also see the results in that they don't keep the house up most of the time. I have a neighbor who unfortunately became a widow, and what she's been doing for the last year is everything from new HVAC, new windows, new roof. She's upgraded, she's making the house...and she's in her 80s. She's in her 80s; I think she's got 15-20 years life expectancy because if you're a healthy 80-year-old you should live for another 10+ years. So, she's preparing the house to stay. The only thing I don't like about the house is it's a high ranch; we talked about it and she's going to probably put an elevator in the house, too, so she can get from the garage (which is drive-in) to the main living space on the high ranch level. She didn't realize that it can be done with so little impact to the actual house. So we've got all of those questions that have to be answered when you talk about: "I want to stay in the house."
08:52
Now let's go to the next thing: "I can't make the house a safe place to live." So now we have to talk about: "Where do I want to go?" Now we talk about vision. "Where do I want to live? What would that ideal home be for the new me?" And when I say "the new me"...the new me could be a 75- or an 80-year-old me that doesn't want to do steps, doesn't want to do you know anything else, but still wants to be able to go out back or have a yard, or I can't tell you what it may be. Or I want to live in hotel-style living. Do you know what I call "hotel-style living"? An assisted living facility, because it's a month-to-month rental in most cases and it gives you everything. It gives you the furnishings, it gives you the common area, it gives you a place to eat, it gives you a lot of different things.
09:54
I don't know what that next home or the next ideal home will be for you. And it will be based upon those questions that we talked about initially. "Do I need or do I want to avoid steps? Do I want to be close to my family?" There are so many factors that go into that question, that "I want to go." And then the first piece which I talked about (renting), in essence: "I can rent a condo; I can rent a co-op." Very popular for my clients is I try to find three-bedroom condos or co-ops (preferably condos) all in a building, but it's a single level. Ideal location, ideal apartment or ideal condo, three-bedroom, two- bath with a terrace, or some access to fresh air. Most of the time, they are about 1500 square feet, an average small house.
11:03
Why do I talk about three bedrooms? Most people have a den right now or a TV room. Most people need that master bedroom with a master bedroom suite. And we usually convert the bathrooms right away, because what we want is a walk-in shower with a lot of the different safety bars, dual heads, a handheld piece, lots of different things that go on, but we make the bathroom extremely safe to age in place. Sometimes we even take off the door and put a barn door, a sliding door on so it's easier access and entry. But we do make modifications. The third bedroom is there for the "What if I need help?" If somebody has to spend the night, there's some place for them to sleep. If I have to bring in long-term care, there's some place for a caregiver to have for their own.
11:55
Second bathroom? I'm sorry, I don't like people using my bathroom, my master suite. So the second bathroom is for the caretaker and for any guests. And then everything else around inside the unit is one floor so it's easy to get around. And if it's in a location near other people, it's phenomenal. Because you know something, as we age, we are social human beings. And the more socially active you are, the more people you talk to, the likelihood is the longer you will live.
12:32
So you've got to make these decisions. You can rent that, especially if you think it's only a five-year period of time. You can own it. You could potentially look at assisted living. Or a lot of people say, "I'm going to go live with a family member or somebody." That's still very popular. The only difference is, we still have to go back to the first question: "Is it safe?" Sometimes we've had situations where a person has sold a house, and then put an extension on their kid's house and made it 100% user-friendly and fully accessible. And what I love about that is usually you just put one door in between the two because as we age, and other issues may come on, we don't want impose because ultimately there may be a caregiver involved. My daughter will be the primary point person (I won't even say "the primary caregiver") but she'll be answering all the questions to the doctor, and so forth and so on.
13:43
And then you always have to even question: "What's the ideal home?" Maybe it's two! Maybe I want a nice one-bedroom apartment for the next 10 years of my life up in New York, and then I want a nice one- or two-bedroom apartment down in some other state. I'm not going to say Florida; everybody always says Florida...but maybe not Florida, maybe a different state. And then again, we always come back to this: "How can I make this financially advantageous, number one?" Because if we sell that big primary residence, hopefully we have a bunch of equity in it. And we might be able to buy something for cash and still have some money left over.
14:31
And then the last piece, most people say, "I don't even want to think about moving. What am I going to do with everything? What am I going to do with the 40 or 50 years of memories that I have in in this house?" In the house behind me I have 30 years of memories. It probably will be (when it gets sold) 40 or 50 years of memories. But you've got to figure out what to do, and stress is a big piece of that puzzle. When you talk about stressors, it's from the Hummels that are sitting in the break front to all of the stuff that's in the attic that you haven't looked at in 10 years. So you've got to start somewhere. Now we have services that we employ, move managers, whatever. Sometimes it's nothing more than Junk Luggers. We had we had a client that said, "I haven't been in my basement in 10 years." She said, "Anything that I need down there, I've already gotten. So just empty it." And while we were emptying it, we found all sorts of stuff. And yes, somebody had to be there to monitor it. But pretty much, it was just a factory line of Junk Loggers to a container and they filled the truck, they filled the truck from the basement with the boxes at all.
16:08
So that stress of: "What do I do with my stuff? How do I arrange to move from point A to point B?" And then there's the stress of: "Will I like this new location?" You see, when you talk about "I want to go," it's not the decision today, unless--and I'm going to say this happens--unless the existing house is totally unsafe and can't be made safe. You can't function in it. We all know people that have had accidents, or have come out of the house and had to go to usually an assisted living facility to start and then make additional decisions because their home was not safe. Sometimes it's putting a ramp in the front of the house, sometimes it's putting an elevator in. But I always tell people, when the when the basic structure of the house without major major changes isn't safe, it's not going to be there. So go look for another house even in the same neighborhood. I tell realtors all the time right now: "Please, please, if you find a ranch with zero entry, similar to what I'm looking at right now, let me know because I probably have somebody that would be interested in buying it and renovating it for themselves, and then living in it for another 10 years+, another stage of their life."
17:31
Let's talk about those financial pieces. It's when you deal with a planner, a manager, they'll help you identify if it is financially advantageous to make the move or stay. Now we come to that last question, which we've sort of talked about a lot, but not directly. And that's the question of healthy housing--and I'm going to use the phrase "healthy housing" and the needs that come along with healthy housing--is: "I may need help." Pretty much everyone at some point will need some assistance. It could be for years, it could be for days, it could be some period in between that. But you do have to start to look at and plan. As I said: ideal is a three-bedroom condo, floor updated, make a safe bathroom, do everything else, have someplace for somebody to live, a caretaker. Now you can bring caretakers in daily, but that adds stress a lot of times, because you don't know who's coming through the door. There's all different reasons.
18:49
The first question that comes up when you start talking about needing help, it may not come from you. That decision about a healthy house or a safe house may be identified by somebody else. Now, you have to have that conversation with family members, and you've got to keep the harmony. Have you ever noticed, especially when you have...not everybody thinks the same way? I don't care if you have one child, four children, or anything else. You have no children, you have an advisor, you have somebody else that you trust their opinions. You may not agree with them, because you may say, "I want to stay in this house. I want to stay in this house." And they may sit back and say, "But it's not safe," which I've said to somebody. "You fell down the steps once. You fell down the steps a second time. Both times there were incidences, but we were able to get you to the hospital and then go from the hospital and all the other stuff." Come out of the hospital--you've got to remember that the hospital has a primary role; they can only release you to a safe environment. If your house and your care isn't being provided in your home, that's not a safe environment. So they're going to sit back and tell you that you're going to need to go to a nursing home or a rehab facility to start. And then the rehab facility has the same obligation to release you to a safe environment. And if they can't, you may have to go to assisted living and stay there for a while. It's a discussion that is better had now than in a crisis situation. And then how to have that discussion--it is very difficult to maintain family harmony, there's no question about it. It's one of the most difficult things in the world, for a child to go to a parent and say, "I don't think the house is safe, I think you have to move out." That's difficult. Parents just envision that child sliding down the banister. It's a very difficult situation, and accepting it is very, very difficult.
21:18
Now there are ways, as I said, to make that house a safe environment. And if you need care, theoretically, 24/7 or 12 hours a day, or whatever, staying in the house sometimes can be the least expensive way of providing that care. Does anybody have--I'm talking as if everybody's in the room. I'm used to the old days when we have these live seminars, and I am having a live seminar, which we're going to talk about, on June 21 covering these issues--but you have to figure out, "What is the cost going to be for the alternatives?" Assisted living, while it's hotel-style living, and it's advertised on TV and everything else, is not cheap. You have to do a financial plan. You have to say, "Can I afford to go into assisted living?"
22:22
And then there's a second whole piece: "If I go into assisted living, I wanted to leave the proceeds of my house to my kids. If I spend it all on assisted living, my kids aren't going to get an inheritance." That may not sit well with people. And then you come up to: "How do the care costs get paid?" It's constantly evolving, at least in the states of New York, New Jersey, and Connecticut--the three states that I mostly work with. It's constantly evolving. New York used to have extremely liberal policies on how to provide care in a home. Still very liberal, much more liberal in Connecticut and New Jersey, but a little bit more difficult. But it may be the best way to provide care for a person who needs supervision or assistance in their home. And we might be able to get the government to pay for someone with proper planning. It's basically, a Medicaid plan. And you talk to an advisor, aging issues management, an attorney, whoever, and you start talking about, "How can I get assistance from the government?" That house that you own is what's known as a "protected asset." And if a family member lives with you two out of the previous five years helping care for you, it's protected for that family member. So you can preserve the value of the home and still get assistance from the government. There's other parts of it, but that's probably what we're talking about here more than anything else, because we're making a housing decision.
24:13
And then just for yourself, there are estate planning parts that come into play at the same point that if my children inherit my house, they inherit at the current value, not at the cost basis. If I sell my house, I might have a massive, massive capital gain that I have to pay. So, I don't want to pay the government $200,000 on a million dollar home. But if that's what has to happen, that's what has to happen.
24:47
So there's all sorts of planning that gets involved. And what we're really doing is a financial plan taking into account all of your housing needs. And I hope you enjoyed this conversation and the issues that it brings up for both you in the decision-making process of "Should I stay or should I go?" and then the second piece, "How do I talk to my family or does my family talk to me?" My daughter wants me to sell the house every other day. Me and my wife don't want to do that. My son wants me to keep the house. Nobody has the same opinions. So guess what? We are staying right now. But we're also in a house that works for us right now. It's a safe and healthy decision to stay in the house at the current time.
25:49
Talk to all of you again soon. Thank you.
25:53
You've been listening to Aging Issues Radio and Joe Soricelli. This podcast has been for informational and educational purposes. It is not to be construed as financial or legal advice specific to your circumstances. If you need help with any matter, be sure to consult with an advisor regarding your specific needs. Investment advice offered through Private Advisor Group, a registered investment advisor and separate entity from Aging Issues Management. Thank you and tune in again.